It’s H2 already. A time to reflect on the year to date as you determine what you need to do next to achieve your goals.
However it’s gone so far, one thing remains front and centre in the minds of SaaS leaders and investors alike. Growth. Or more specifically, balancing top line growth with efficiency.
Whether it’s going well and you’re looking to optimise or there are still leaks in your funnel that you need to fix, it’s a challenge that SaaS is facing together.
I’ve had a couple of interesting conversations and have heard some good insights on this recently. One on taking a step back to really understand where and how you need to scale and the other on key moments in the customer lifecycle that can drive revenue growth.
Both, I think, present great opportunities as we go into a new quarter.
How to view growth as you scale
First up, Marcelo Lebre President and Co-Founder of Remote on how to view growth as you scale – and how that philosophy works in practice.
Remote has scaled to a global team of 1600 people since launching in 2019. In 2022, it raised a $300M Series C at a $3B valuation. With such huge growth in a short space of time, Marcelo explained how he and co-founder Job van der Voort have kept the company operationally efficient.
Marcelo told us that many founders make the same mistake–“holding shift and trying to scale the whole thing at once”, particularly after a fundraise. Where instead, they should be bringing it back to the fundamentals to find where they need to scale first.
Marcelo said founders need to remember that “the role of a business is to take one dollar and generate more [dollars]”. If that’s the company’s role then every department “is a variable of that equation”.
For Marcelo, keeping this front of mind encourages you to scale more efficiently. Why? Because not all areas of a business scale at the same pace, some grow exponentially and some grow linearly. He added that it’s a harsh reality for founders but part of the job is to understand which areas of your business should grow at velocity–and that it doesn’t always mean your sales and growth teams.
He encourages founders to look for where inefficiencies lie and take a step back to identify where you really need to put money so you get more on the other end.
Watch the full conversation with Marcelo below.
Meaningful customer moments that drive revenue growth
Marcelo’s approach moves me to the second conversation. One with Xero CRO Ashley Grech. For Ashley, growth refers to cross sells, upsells, and retention. As for where to allocate your money and resource to power it, she says to get smart about where to automate so that you can deploy your best (and most expensive) assets–your team–where they’ll be most valuable. For growth, that’s where they can actively contribute to generating expansion revenue or increasing your LTV.
Here, she explained how to identify and deploy powerful data that will “guarantee that you’ll see a lift in meaningful moments with [those] customers”.
She said to divide the information you have about your prospect and customer behaviour into “positive and negative heuristics”. A positive heuristic is things like payment volume increasing and more users logging in. Negative heuristics might be a user submitting a lot of support tickets or a user that experiences an outage.
To use this data effectively, identify the behaviours relevant to your business and push them into your CRM. When they occur, reach out to your customers – whether positive or negative. When Ashley implemented this approach, the team reached out to a control group with an email and phone call each time a heuristic happened. A positive example might be a message to acknowledge increased usage and a conversation about how else you can help them grow. After a negative occurrence, the message was just to let them know that support was there.
During the test, the control group had a 20% difference in net revenue retention (NRR) – and the team had only been able to reach them 50% of the time. Why the uplift? Because it gives you the opportunity to catch customers in moments that really matter and humanise the business you’re trying to promote.
Watch the full conversation with Ashley below.
Get more insights on SaaS growth
However you’re looking to tackle H2, SaaStock will be here bringing more insights from the community based on the challenges you’ve told us you’re facing. Feel free to get in touch and let us know if there’s something specific you’d like us to cover.
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